UPDATE 1-Indonesia announces moves to reduce imports, lift investment
* Measures taken after sell-down in Indonesian assets
* 2013 growth target reduced to 5.9-6.0 pct from 6.3 pct
* One goal of package is reduction in imports
(Adds quotes, details)
JAKARTA, Aug 23 (Reuters) - Indonesia announced on Friday a package of policy measures to reduce imports and boost investment in labour-intensive industries as it struggles to revive confidence and consumer spending in Southeast Asia's largest economy.
The intervention by President Susilo Bambang Yudhoyono comes after a punishing week for emerging markets, with currencies from Brazil to India hit hard by fears of higher global borrowing costs and a reduction in cheap cash from the United States.
Indonesia has faced sell-offs in the rupiah, stocks and bonds after an unexpectedly large second-quarter current-account deficit triggered fears that the weak global economy will only further erode exports at a time when a surge in inflation is crimping domestic demand.
Chief Economic Minister Hatta Rajasa said the government will increase the import tax on luxury cars, seek to reduce oil imports and provide tax incentives for investment in agriculture and in metals industries. Details of some measures are expected to be provided by the central bank governor and finance minister later on Friday.
"The government and Bank Indonesia will take steps particularly in the financial sector and current account, and combined with structural policy, to maintain economic growth at a realistic level," Hatta told reporters.
Chua Hak Bin, economist at Bank of America Merrill Lynch in Singapore, said most of the measures looked more medium- and long-term, such as tax incentives and simplifying permits. "The near-term impact on the current-account deficit from these measures is less clear," he said.
The government's economic growth target for this year is 6.3 percent, but officials have acknowledged this is out of reach. Most economists expect growth to be below 6 percent for the first time in years.
The government revised its GDP growth estimate for this year to 5.9-6.0 percent, down from 6.3 percent earlier, Finance Minister Chatib Basri said.
Growth in the second quarter of 5.8 percent was the slowest since 2010.
A slowdown in growth in China has squeezed demand and prices for Indonesia's most lucrative exports - from coal to tin and palm oil, while foreign portfolio investment and foreign investment has slowed sharply on expectations the U.S. Federal Reserve will taper its bond-buying programme later this year.
The slide in exports is coinciding with strong domestic demand for imports, stoking a trade deficit. In the second quarter, Indonesia's current-account deficit was a worse-than-expected $9.8 billion, among the highest on record.
That's turned the rupiah into one of Asia's worst performing currencies this year. In 2013, the rupiah has weakened about 11 percent against the dollar.
(Additional reporting by Fergus Jensen; Writing by Randy Fabi; Editing by Jason Szep and Richard Borsuk)